The Government's legislative programme also contains a Bill giving firms a statutory right to claim interest on late payments - a particular problem for small firms.
However, it appears to have backed away from introducing laws to make it difficult to launch hostile takeover bids. Plans for a root-and-branch reform of competition bodies such as the Monopolies and Mergers Commission and the Office of Fair Trading also appear to have been put on the backburner.
The Competition Bill will have the effect of incorporating articles 85 and 86 of the Treaty of Rome into UK legislation. This will give the director- general of Fair Trading, John Bridgeman, similar powers to the European Commission's cartel-busting division. He will be able to mount dawn raids on companies suspected of operating price-fixing rings or abusing their power in particular markets. Third parties will also have the right to claim damages.
The legislation will replace the Restrictive Trade Practices Act with a new law prohibiting anti-competitive agreements, providing a stronger deterrent against abuses of market power.
The OFT and business organisations have lobbied long and hard for a reform of competition law and yesterday the Confederation of British Industry welcomed the new measures.
But the new Fair Payment of Commercial Debts Bill has split the business community. Apart from giving firms a statutory right to interest above a given threshold, it will also require large firms to publish their record on late payment and require government departments to pay their bills on time.
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